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# What can other members use? A methodology for estimating the cost of service levels. - PowerPoint PPT Presentation

10 % Complete. Modeling a Conversion of Suppliers from Prepaid to Collect (P2C) System Research Team: Dr. Sarah Root (PI), Dr. Russell Meller, Prabuddha Lohani. 0%. 100%. Sponsor: Sam’s Club Thrust Area: Distribution Problem in context:

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Modeling a Conversion of Suppliers from Prepaid to Collect (P2C) SystemResearch Team: Dr. Sarah Root (PI), Dr. Russell Meller, Prabuddha Lohani

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• Thrust Area: Distribution

• Problem in context:

• Sam’s is looking to move more of its suppliers from prepaid to collect.

• Identify opportunities to reduce costs by moving to collect terms

• The quantitative tradeoff between different level of service (4- day window, 5-day window ) and the cost is unknown.

• Important/Expected Results:

• Develop a model to estimate baseline inbound transportation cost increases as a result of P2C conversion.

• Help in prioritizing the suppliers who should be converted from prepaid to collect.

• Construct model to estimate the effect of MABD on transportation cost.

• Validation of model, working toward a larger implementation.

• Technical Approach:

• Data collection and analysis

• Formulation of strategy

• Mathematical modeling of operational problems

• Sensitivity analysis

• Documentation

• What can other members use?

• A methodology for estimating the cost of service levels.

• A model to prioritize and estimate supplier transportation cost, and savings that result from P2C conversion.

• Recommendations showing potential ways to off set the cost increases with the benefits of controlling the inbound flow to bring efficiencies.

Project # UA10 – Sam’s Club